With Ad Blocking Use On The Rise, What Happens To Online Publishers? : All Tech Considered A new Apple update could challenge the current online business model. Some say less ad revenue means more sites will charge for access to content. There's also a move to block the ad blockers.

With Ad Blocking Use On The Rise, What Happens To Online Publishers?

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ROBERT SIEGEL, HOST:

And it's time for All Tech Considered.

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SIEGEL: Today on All Tech, ad blocking and ad block blocking. You can download software to block ads online, and as you can well imagine, that doesn't sit well with sites that sell online advertising. Will the freedom to choose not to see ads do in the Web economy, and how are publishers fighting back? We're going to hear from the CEO of Adblock Plus and from a new company whose focus is neutralizing ad blocking. First though, Lara O'Reilly, who covers this stuff. She's an editor at Business Insider, and she joins us from London.

Welcome to the program.

LARA O'REILLY: Hello.

SIEGEL: So I'm new to all this. I downloaded Adblock Plus to the Chrome browser on my desktop. And here's what I got when I went to, say, the Merriam-Webster word game site and clicked on the Daily Jumble. The game began right away.

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SIEGEL: Otherwise, on another browser without this Adblock, what I got instead was this...

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UNIDENTIFIED MAN: Six Flags America is bigger, better and wetter.

SIEGEL: A commercial. On newspaper and magazine sites, typically, I see ads. With this, I don't see them at all. How big is this?

O'REILLY: So according to some estimates, 144 million people globally used an ad blocker last year. And that was up 70 percent, year on year. So it's definitely on the rise, but it's not necessarily a large proportion of the Internet population. It tends to be the more kind of technically advanced user, skews towards males, gamers and so on.

SIEGEL: On mobile devices, Apple could soon be making ad blocking easier. What is Apple about to do? Do we know?

O'REILLY: It's not entirely clear what Apple is up to here. All we've seen so far is some developer documentation for its new version of iOS, which is its operating system, on tablets, their iPad and the iPhone and for the browser, which is called Safari. So what they're saying is that they will allow developers - people that build apps - to build extensions that block content on Safari. And it does stipulate that that content could include ads, and Apple hasn't confirmed what it means by this yet. What we can assume is, you can kind of say, I want to block pop-up ads but I don't want to block, kind of, banner ads or video ads. You'll kind of go through like that.

SIEGEL: Now, when I went to wired.com with Chrome after having plugged-in Adblock Plus, I saw, where the ads would otherwise be, a message - please do us a solid and disable your ad blocker. Add us to your whitelist.

How threatening is all this to the publishers? It sounds like wired.com is taking it pretty seriously.

O'REILLY: Well, depending on how far you go, the doomsayers say this could be the end of the free Internet as we know it if ad blocking becomes mainstream. Every time you go to a free Internet site, whether you kind of realize it or not, a transaction takes place. You're viewing content for free, and in exchange, the publisher's served you ads. That's how they make money. That's how journalists like me have roofs over their heads and manage to pay for our dinner each night.

SIEGEL: Well, Lara O'Reilly, of Business Insider, thanks for talking with us about it.

O'REILLY: Thanks very much.

SIEGEL: Tim Schumacher is the chairman of Adblock Plus, the most downloaded ad blocking software, the one I mentioned earlier that I downloaded. It's for desktops. And he joins me now from his home in Cologne, Germany.

Welcome to the program.

TIM SCHUMACHER: Nice to meet you Robert.

SIEGEL: What do you say to companies that depend on advertising online who say, look, there'll be a lot less content on the Web if there's a lot less ad revenue, which means there'll be a lot more places you have to pay for access to view the content?

SCHUMACHER: I think those companies are right, and that's exactly why Adblock Plus has a different way of being an ad blocker. Now, first of all, of course people love to block annoying ads, especially video ads, pop-ups. Now, at the same time, publishers' interests are really important, and so we've come up with what we call acceptable ads, and those are ads which are non-annoying - small text ads, small pictures - and they still help financing the Web. And that's what we believe the Web needs to be.

SIEGEL: And do those ads - would pass through the filter on any site or by any advertiser? Nobody has to pay anything to be whitelisted?

SCHUMACHER: Yeah, that's correct. So the most important thing is really if ads are meeting the community's set criteria. If they do, they get whitelisted. And 90 percent of companies and individual blogs get whitelisted for free. Our model really, is just that the big companies, they need to pay, and they basically need to finance that model for everyone else. And that's about 10 percent of companies.

SIEGEL: Do you welcome the ad blocking arms race which will occur when software is developed to block the ad blockers?

SCHUMACHER: Well, we're up for the challenge, but we don't welcome it because we don't think it's the right thing to stick advertising to users who've actually made a conscious choice of not wanting to have advertising. We actually think it's better to tone down advertising for those users, appeal to those users and have a dialogue with those users, opposed to just sticking the ads down their throat.

SIEGEL: I work in noncommercial broadcasting (laughter). Where did you acquire your aversion to commercials?

SCHUMACHER: Well, you know, ironically, my profession before was in online advertising...

SIEGEL: Ah-ha.

SCHUMACHER: ...But I saw what has been going wrong. That's why we started Adblock Plus and said, let's make this better.

SIEGEL: It's the passion of the convert that I'm hearing here.

SCHUMACHER: Exactly.

SIEGEL: Tim Schumacher, chairman of Ad block Plus, in Cologne, Germany, thanks for talking with us today.

SCHUMACHER: Thanks for having me on the show.

SIEGEL: Well, now to someone who's trying to do something about ad blocking on behalf of advertisers. Ben Barokas has worked in the world of online advertising since 2000, and most recently did that for Google, and he's launched a company called Sourcepoint.

Welcome to the program.

BEN BAROKAS: Thank you Robert.

SIEGEL: You're trying to counter the trend toward ad blocking with Sourcepoint. Tells us how you're doing that.

BAROKAS: So Sourcepoint is a content compensation platform. We believe that any user has a choice of whether or not they want to consume advertising or that they're able to subscribe. In order to provide subscription services that are valuable enough to the user, there has to be multiple sites bundled together. We believe that users would love to surf from site to site, device to device, without hitting pay walls and consuming unnecessary ads.

SIEGEL: What do you make of Tim Schumacher's distinction between ads that are relatively subtle and unobtrusive and ads that are annoying, and a filter that permits the former through but not the latter?

BAROKAS: Well, I would say one person's trash is another's treasure. Some people would rather watch a one-minute video ad once a day, others are OK with banners and buttons. But that's something that an individual user can decide and not a company like Adblock Plus.

SIEGEL: Is there software that you're working on that, apart from offering this choice of pay or look at the advertising, would simply just break through and guarantee that the advertising gets through the ad block software?

BAROKAS: Certainly. We find it necessary to punch through the add blocker, or circumvent it - however you want to say it - in order to provide the revenue to the publisher.

SIEGEL: I feel a little bit like this is the "Empire Strikes Back" interview of the segment that we have...

BAROKAS: (Laughter).

SIEGEL: ... Where you're getting those ads back on, or getting a way to get those ads through, no matter who's out there.

BAROKAS: Well, the other part of it is that we can watch the most amazing media that has been created, and companies like NPR begin to wither away. That's a future that I don't want to think about.

SIEGEL: Well, Ben Barokas, you've thought the unthinkable there for a moment, but thanks for talking with us about your company, Sourcepoint, and ad blocking.

BAROKAS: Thanks so much for having me.

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